UPDATE 2-Bombardier to cut 1,800 jobs, aerospace head retires

Reuters Staff

4 Min Read

(Adds job cuts, analyst comment, background on previous departures.)

By Euan Rocha and Allison Martell

TORONTO, July 23 (Reuters) - Struggling with long delays in its CSeries jetliner, aircraft maker Bombardier Inc on Wednesday announced it will reorganize its business structure and cut 1,800 jobs, and it said the head of its aerospace division would retire.

The Montreal-based company is splitting its aerospace unit into three segments focused on business aircraft, commercial aircraft and aerostructures and engineering services.

The three units, along with Bombardier’s rail-industry focused transportation unit, will all have separate heads reporting directly to Chief Executive Officer Pierre Beaudoin.

As part of the moves, Bombardier Aerospace President and Chief Operating Officer Guy Hachey will retire.

His retirement is the latest senior departure from the CSeries program. Last year, Bombardier replaced Chet Fuller, head salesman for the CSeries. Gary Scott, head of Bombardier’s commercial plane unit and a champion of the CSeries program, retired in 2011.

“Stability is important for an aircraft program, and they haven’t been very good at all about stability,” said aerospace analyst Richard Aboulafia of Virginia-based Teal Group.

The revamp means 1,800 aerospace jobs would be eliminated, Bombardier spokeswoman Isabelle Rondeau said. Bombardier had 76,400 employees at the end of 2013 of which 37,400 worked in the aerospace division, she said.

The job cuts are in addition to reductions announced in January, when Bombardier said it would cut 1,700 aerospace jobs. The company has been pushing to preserve cash after costly setbacks in the development of the CSeries.

Wednesday’s shakeup comes as Bombardier continues to work on the issues that have stymied the CSeries program.

The new jet family is meant to crack the 100- to 149-seat market and pits the company against industry giants Boeing Co and Airbus. Bombardier has touted the CSeries jet’s superior fuel and operating efficiency but has faced a number of obstacles and delays, including an engine failure that grounded its test aircraft in May.

“The new aerospace organizational structure will enable us to be more agile and flexible in addressing customer needs, while increasing our focus on growth areas,” Beaudoin said in a statement.

The company said the new structure will be in place Jan. 1.

Hachey has been high-profile in promoting the CSeries program, speaking with media and appearing at airshows, including the Farnborough International Airshow in England that ended last week.

Bombardier surprised many analysts and investors by securing a sizable number of orders for the CSeries at Farnborough, despite the aircraft not making an appearance at the airshow.

The company said its new aerostructures and engineering unit will specialize in the design and development of composite and metallic aerostructures in all classes of civil aircraft and all categories of structure, including fuselages and wings. (Additional reporting by Solarina Ho in Toronto and Kanika Sikka in Bangalore; Editing by Sriraj Kalluvila, Lisa Shumaker, Amran Abocar and Cynthia Osterman)